25 Employee Retention Strategies for 2024 + Examples

Employee Retention Strategies

Employee retention will continue to be a huge challenge throughout 2024. A tight Australian job market means that job mobility is on the rise as companies are doing everything they can to lure away top talent. 

Statistics suggest the “Great Resignation” hit the Australian economy in 2022 as quit rates hit 10-year highs, with professional, scientific, and technical services most affected.

If you want to keep your best workers, you need these employee retention strategies for 2024.

Contents

Why your business needs an employee retention strategy in 2024

The skills shortage

Australia is going through a skills shortage. According to a National Skills Commission report, 286 occupations experienced labour shortages in 2022, up from 153 in 2021. It’s particularly pronounced in highly technical jobs, like healthcare and software development. 

Losing great staff is never ideal. However, doing so in an environment where it’s challenging to find quality replacements is even worse. Ignoring employee retention could negatively impact productivity and competitiveness.

Employee engagement

Employee retention and employee engagement are highly related topics. Engaged employees are happier, more productive, and 87% less likely to leave. Employee retention strategies are part of an overall orientation towards improving job satisfaction and making your business a better place to work.

Attract top talent

The tight labour market has made talent acquisition a big challenge. Employees can afford to do a lot of research on the businesses they work for and be very selective about their final decisions.

In our hyper-connected social media world, employees are empowered to be more vocal than ever. If a company has a toxic culture, poor management, or overworked employees, potential new hires will hear all about it on social media or on anonymous employer review sites.

The internet has allowed employees access to an unprecedented amount of company information on compensation packages, career opportunities, and company culture. This level of transparency is positive if a company’s talent acquisition marketing and strategies align with reality; however, for companies, where this is not the case, attraction and retention of employees will become nearly impossible.

Boost employee job satisfaction

Employee satisfaction consists of several different elements, like compensation, colleagues and manager relationships, the work environment, and work-life balance. Studies have shown that job satisfaction is a reliable predictor of retention in global workplaces.

Focusing on employee retention necessitates, paying attention to employee experience and satisfaction and giving employees at least some of what they need to feel happy at work will help boost employee job satisfaction.

Save time & money

While implementing good employee retention strategies might cost money, so does losing good workers. When top talent leaves, it takes new employees time to on board, start contributing, and become productive. This loss of productivity costs money and can hurt team morale.

According to the 2022 HR Industry Benchmark Study, the average cost of recruiting a new employee in Australia is $23,000. This figure doesn’t include salary or superannuation. The same report suggests that the time to hire has jumped from 33.4 to a staggering 40 days, with these figures more pronounced in specialist industries like tech and life sciences.

Why do employees decide to leave?

There are lots of different reasons why employees decide to leave for new pastures. While you can’t stop everyone from going, if a company’s employee retention rate is low, it could speak to broader problems within the organisation.

Here are some of the main reasons why employees are choosing to leave companies. 

Lack of value alignment

One of the big employment stories that resulted from COVID-19 was that employees had time to slow down and take stock of their work life. Many workers began to question whether their work was meaningful to them. 

According to data from the employee experience platform Qualtrics, sharing a companies mission, values, and vision means employees are more likely to:

  • Recommend their employer as a place to work (70%)
  • Have a feeling of personal accomplishment (72%)
  • Plan to stay at the business (66%)

Inadequate salary

An uncompetitive salary can leave workers feeling undervalued or even taken advantage of. This sort of resentment can build, leaving employees unengaged. Everyone has bills to pay, and better-paid opportunities elsewhere can cause employees to quit.

According to On Q’s recent Job Satisfaction & Salary Survey Report, the number one reason Australian life sciences sector employees are leaving their employer is improved salary and benefits.

Feeling unappreciated

If employees don’t feel valued or acknowledged for the hard work they do, they can lose motivation. Even small gestures like a thank you can make a big difference, which is why the absence of encouragement is particularly galling to staff.

Poor work-life balance

For some employees, work is the centre of their lives. They love competing and grinding their way to the top. However, the majority of people need a better work-life balance, including time for rest, family, and other hobbies.

A poor work-life balance can cause burnout from the stress and the demands of work. Many employees cite this as a reason they quit for somewhere more balanced.

Lack of opportunities

A lack of professional development opportunities is one of the most commonly cited reasons for people to quit their job. When employees feel their job is going nowhere, they start to look at organisations that offer support and a pathway towards more senior roles.

How to calculate your employee retention rate?

Calculating your employee retention rate is simple.

You need to get two figures.

A: The total number of employees during a fixed period, such as a year or a month.

B: The total number of employees that left during that period.

Then, use the formula: (A-B)/A x 100

So, let’s say you have 170 employees and 25 leave during the year. Your employee retention rate is: (170 – 25) ÷ 170 x 100 = 85.29%

What is considered a normal turnover rate?

Average turnover rates depend on the industry. However, statistics suggest an average number of around 12% to 20%. These figures include voluntary and involuntary turnover.

Experts suggest that businesses should aim for a retention rate of 90%.

25 Employee retention strategies for 2024

Now that you know why employees quit and why employee retention strategies are important, it’s time to think about what you can do to reduce turnover.

Here are 25 strategies to help you improve employee retention in 2023 and beyond.

#1. Create professional development opportunities

Offering career advancement opportunities is one of the most effective employee retention strategies. Employees are ambitious. They don’t want to stay at dead-end organisations without opportunities to advance or learn new skills.

If employees can’t see a path to progression, they will be on the lookout for more compelling job opportunities. However, you can increase employee engagement if you can show them that they have a future within the organisation.

Investing in personal investment can take many forms. You can provide reimbursement for tuition, encourage employees to attend conferences and workshops, or have continuing education programs.

Additionally, having good succession planning can show your employees that you are serious about their future. While there are lots of positions that will require outside work, employing from within can be an excellent way to ensure management is steeped in your company culture.

#2. Encourage a healthy work-life balance

Although it has been an observable trend for the last number of years, the importance of work-life balance has grown since the COVID-19 pandemic. With more time to slow down and reflect, many employees started to question the role that work plays in their lives.

Long hours, overtime, lengthy commutes, and other things like answering work emails after hours have become standard practice. Many employees saw it as the only way to progress. However, sacrificing friends, family, hobbies, and physical health for work leaves many people feeling empty. While work can be very fulfilling, it’s just one dimension of a meaningful life.

Encouraging a good work-life balance starts at the top.

#3. Create the right company culture

Creating a strong company culture is a long-term project. It’s not something that you can change in a week. A positive atmosphere, gratitude and support, and a healthy orientation towards work are a few aspects of a company culture that workers value.

Your culture is a combination of the things your business stands for and how it works. Listening, good feedback, career progression, and honesty and transparency are the building blocks of a positive company culture. Implementing these values is critical.

#4. Health and wellness initiatives

Employee mental health and well-being have gained a lot of traction in the corporate world in recent years. Work can be tough, and employees are at risk of burnout. Additionally, life is full of stresses and strains, so ensuring that your employees have support through difficult times is important.

How you implement health and wellness initiatives comes down to personal preference. Some businesses offer onsite massages, meditation rooms, and retreats. But if you don’t have the budget for that, you can still prioritise employee health by providing healthy snacks, encouraging physical activity, holidays and time off.

Business leaders also have a big role to play here by setting an example by taking time off for holidays and rest. When employees see their boss working 60 to 80 hours a week without holidays, they can feel that’s the only way to get ahead in the company. It shouldn’t be.

#5. Recognise and reward hard work

Rewarding good employees for their hard work and commitment is a great way to boost employee retention, satisfaction, and engagement. Staff need to feel valued. Even small rewards or recognitions can motivate employees.

The rewards you offer don’t need to be excessive. Employee appreciation can come in many different forms.

Perhaps the best thing you can do here is to ask employees what they would like. Some stay might prefer an afternoon off, some might like a cash prize, and others would love a restaurant voucher.

Understand your team and what motivates them. Creating positive associations with working hard will do wonders for your employee retention.

#6. Offer flexible schedules

Per a recent global study by Future Forum, flexibility is a significant issue for employees. Of those surveyed, more than three-quarters wanted flexibility about where they work. More pointedly, 93% said when they work was a big factor in whether they’d stay in a job.

Furthermore, On Q’s latest Job Satisfaction & Salary Survey Report shows that flexibility in the workplace is the number one reason for employees to stay with their current employer.

Flexible hours or days are a low-cost employee retention strategy to help retain employees. Life is complicated. People have children or other dependents and responsibilities. Offering ways to help staff manage their life outside work will boost retention.

Flexible work arrangements won’t work for every business. However, they can be implemented without a loss of productivity. In some cases, they can boost productivity.

#7. Benchmark your salaries and overall packages

Competitive compensation is important for employee retention. An inadequate salary is one of the most commonly cited reasons an employee will seek a new job. Employees want to feel valued and respected, and a competitive salary is a big part of that.

Benchmarking your salaries against the current market rates is a great way to ensure that you stay competitive. You can do this in several ways, such as hiring a consultant, looking at recruitment websites and platforms or reading industry reports.

It’s worth noting that increasing base salaries won’t fix all of the retention problems. In fact, according to numerous surveys, many employees prefer perks over pay raises. Interestingly, this effect is most pronounced (89%) for employees in the 18-34 demographic.

So while salaries that are in line with your competition are instrumental in holding onto your best staff, the right overall package can make a huge difference, which is good news for employers that don’t have the budget for pay increases.

One of the key things about picking the right benefits is that it improves the overall employee experience. Choosing the benefits that move the needle requires consultation with your employees in combination with benchmarking against your competition.

#8. Think about your onboarding process

Starting a new job can be a fairly stressful time. Having a strong onboarding process is a meaningful way to make new hires feel comfortable and part of the team, but it also helps them become productive as early as possible.

A good onboarding process is about more than just making sure each new employee fills out their paperwork and reads the code of conduct document. It’s about empowering them to do their job to full capacity.

We’ve all probably had the feeling of starting a new job and feeling out to sea. However, in the worst cases, this sentiment continues for months if you don’t really feel supported or connected to the business because no one is helping you feel welcomed or part of the team. Situations like these are terrible for talent retention and are why more than 30% of employees quit within the first six months.

Research conducted by the Brandon Hall Group found that companies with a strong onboarding process improve new hire retention by 82%.

Your onboarding process should consider your remote employees too. It’s easy for them to get lost in the mix, so ensure that you schedule regular updates to check on their process and ensure they have adequate support.

#9. Reduce employee burnout

Reducing burnout is a core part of any employee retention strategy. Human resource management teams have become more conscious of how burnout can hurt productivity, cause sick days, and affect mental health. If your organisation doesn’t take action to reduce burnout, employees will end up leaving, one way or the other.

There are lots of things that employers can do to reduce employee burnout. A big step is to make management responsible for monitoring and intervening before things get out of hand. Setting clear role expectations and reasonable workloads is very important. Similarly, encouraging teamwork and, as mentioned above, implementing health and wellness initiatives can go a long way.

Finally, organisations should consider the work environment too. Are there areas that your staff can go to get a quiet moment? They can make a big difference.

#10. Focus on employee engagement

Many people confuse employee engagement and employee satisfaction. While there is a fair degree of crossover, engagement is driven by a deep connection with the organisation and its purpose and mission. When it’s present, employees are motivated to turn up every day and give their all. On the other hand, satisfaction can be achieved through simple external factors like compensation.

Gallup’s 2022 Guide to Employee Engagement outlines five key steps organisations can use to increase staff commitment. They recommend:

  • Using surveys to measure engagement
  • Use survey results as a springboard for conversations about engagement
  • Work on clear and consistent communication with your employees 
  • Place an emphasis on health and wellbeing
  • Have conversations that focus on your employees’ strengths

Engaged employees are far more likely to stay in their jobs. They have a strong connection with the organisation’s purpose, which drives them to build stronger relationships that increase productivity.

#11. Job security

Surveys during the COVID-19 pandemic revealed that most employees (51%) cited job security rather than pay (32%) as a contributing factor in staying at their job. While those figures may have been influenced by a mood of uncertainty over economic collapse, the sentiment could remain relevant if fears over an upcoming recession play out.

Good communication and transparency can boost employees’ feelings of job security. Likewise, investing in training and job opportunities also helps. While you can’t control the future, you can ensure that your staff can trust you to keep them up to date on happenings in the company that could affect them. 

#12. Hire staff that fit your culture

One of the best ways to reduce employee turnover is to hire the right people in the first place. While some candidates might have great skills, if their style alienates your current employees, it can really harm morale.

Sometimes the best person for the job isn’t the candidate with the most experience or education. You can train people in work skills, but values are more challenging to teach.

Of course, fitting the culture doesn’t mean your workers should be the same. There is plenty of room for diversity and different approaches as long as everyone is pulling together. Many teams take a psychographic approach to ensure they have a balance of the different personality types it takes to run a successful business.

Make questions about culture fit part of your recruitment process. Ask behavioural questions that go beyond skills and experience and instead look at alignment with your company values.

#13. Offer more positive feedback

Feedback is a crucial part of growth. However, offering the right blend of positive and constructive feedback isn’t always easy. The Harvard Business Review released an influential study in the past that suggests a ratio of around five positive comments to one negative comment is the average in high-performing teams.

That said, make sure you don’t fall into the trap of giving criticism and praise in the same feedback session. An interesting recent article in Forbes highlighted that two-thirds of employees want positive and negative feedback delivered at different times. Additionally, when you do provide negative feedback, employees want it to be data-driven.

#14. Sponsor ongoing education

A lot of businesses say they care about professional development and growth. However, they don’t actively encourage it. Setting up programs where you can reimburse staff for training and development can boost your productivity. Additionally, in times of severe skills shortages in the market, being able to promote from within can give you an edge.

Good business forecasting can help you identify the areas where you will need specific skills in the future. Targeting staff for promotion in these roles can help you reach your targets and grow your businesses without overreliance on the employment market.

#15. Collect data from employee surveys

Surveys are a great way to learn about employee dissatisfaction. Regular short surveys can help you gauge employee morale and get their thoughts and feedback about a range of issues across your business.

By taking regular pulse surveys, you can get the lead on issues. From there, you can act quickly and decisively to fix the problems before employees leave.

#16. Learn from exit interviews

You can’t stop everyone from leaving. Some level of employee turnover is inevitable. However, you can learn a lot from each departing employee through exit interviews.

One of the best things about exit interviews is that employees can feel free to really speak their minds. While sometimes these things will be hard to hear, they are a great way to learn a lot about your organisation, teams, and management.

Collecting, analysing, and acting on exit data can help you proactively reduce employee turnover. It’s a vital part of your overall retention strategies.

#17. Offer remote work

Offering remote work can boost employee retention and your recruitment process. While not all your employees will want to work from home, many workers thrived in remote work during COVID-19. Of course, even before the pandemic, remote work was becoming more popular because of improved communication tools.

Remote work helps broaden the talent pool you can draw from. It also allows your workers more flexibility about where they live, which can decrease the likelihood they will leave your organisation.

Research shows there is a fair degree of misalignment between remote work preferences and actual work arrangements. Some polls even suggest that 75% of workers want location flexibility in the workplace. 

#18. Encourage leadership development

Encouraging leadership development is another great way to improve employee retention. Although this is slightly related to offering professional development, it is more focused on building the next generation of leaders and executives.

Leadership courses, development programs, and encouraging some levels of autonomy and decision-making among your staff can all help them feel more respected, invested in the business, and as a result, more likely to stick around.

#19. Work on your leadership

Poor leadership is one of the biggest causes of high employee turnover. Thankfully, leadership skills are something you can teach. 

Compassionate, transparent, and communicative leadership helps retention considerably. Examine how management deals with employees and provide proactive training to help create a better environment.

#20. Ensure you support your workers with the right work tools

Old or inadequate tools can make the job harder than it needs to be. As consumer software has improved, it’s raised the bar significantly. Now, a lot of older enterprise software lacks user-friendliness and functionality by comparison.

If employees feel that you are reluctant to invest in the tools that help them do their jobs, they can easily become frustrated or demotivated. Boost your retention efforts by investing in modern tools that support your employees, including automated tools. 

Good software will reduce the amount of time your staff spends on mundane, repetitive tasks. Additionally, it frees them up to provide more valuable and meaningful work.

#21. Think about communication

Good communication should be part of your retention strategy. Employees shouldn’t feel left in the dark about decisions or the future of the business.

Of course, communication is about more than just how management speaks to employees. It’s also about ensuring the workers have the tools and opportunities to speak to each. 

Communication tools like Slack can help foster a feeling of connection between employees, but if you want to ensure your company’s success, you should find ways to boost collaboration and relationships between your workers too.

#22. Offer great benefits that align with company culture and mission

There is only so far you can go with salaries before they stop having an impact on talent acquisition and retention. After all, you can’t start paying junior members the same as senior staff without raising eyebrows. However, you can ensure you have a compensation package that makes a difference.

One of the most important things you can do is to keep up to date on what other businesses are offering. Benchmarking your benefits allows you to see what else is out there.

Now, there are a couple of ways you can think about this. You could just try and match what is out there, which will probably work a lot of the time. However, if you can find a way to align your benefits with your company culture, you can have a really strong impact that helps retain employees.

For example, if your business is about self-improvement, learning, and being the best, it makes sense to offer educational support for growth and progress, bonuses, and more. Similarly, if your brand is about employee togetherness, you can lean into that by providing social, family, and wellness perks.

#23. Create mentorship programs

Mentorship programs help develop your existing staff, pass down knowledge and expertise, and create stronger bonds between your workers. Formalising these programs is a great way to ensure these programs take place.

Employees are more likely to stay with a company if they feel they are learning and progressing. Taking mentorship programs seriously is a good way to show that you care.

#24. Embrace diversity, equity, and inclusion (DEI)

Remember when we talked about how your employees wanted to work for businesses that shared their values? Well, diversity, equity and inclusion are big priorities for modern workers.

Having a diverse, equitable, and inclusive workplace has many benefits. If you can make progress towards these ideals, it creates trust, which is a huge predictor of retention. 

For historically marginalised people, an organisation that shares these values will make them feel they have a fair chance of progressing.

#25. Consider sabbatical programs

Sabbatical programs have become popular in the tech industry as a way to keep top talent at the firm for longer. These programs can be set for whatever length you want, from a few months to a year. While it won’t be possible for each business to implement these policies, they can make a huge amount of difference for each employee.

Staff can use this time to upskill, travel, or spend time with friends and family. Then, they can return to your business refreshed and ready to contribute.

Conclusion: Implementing your employee retention strategies

As you can see, several different factors influence motivation, satisfaction, and retention. But how do you put them all together, so they translate into increased employee retention?

The first step starts with measuring your retention. Use the formula we listed above to identify whether retention is a big issue for your firm. Next, speak to your team and find out what they want. Use surveys if necessary. 

Gather all that data and start putting together employee retention strategies that work for your staff. High turnover isn’t something you can fix in a day. However, if you implement our steps, you can go a long way towards promoting engagement, satisfaction, and retention.

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